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Technical Outlook- Gold and Silver

With the uncertainty over Greece election finally being removed and the hawkish tone of FOMC members in recent meeting, the precious metal basket wiped its previous week’s gains. Market players look for Advance estimations of Q4 2014 US GDP in order to determine USD moves, that in-turn is negatively correlated with the prices of Gold and Silver.

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Given the backdrop, the following is a brief technical overview of Gold and Silver.

GOLD

Failure to sustain the 1300 break pulled back the Gold prices to its 200-day SMA, near $1263, ahead of the US GDP release, breaking which the $1240 - $1238 region, encompassing the 50% Fibonaci Retracement of its July – November 2014 decline, is likely to become immediate support for the yellow metal prices. Moreover, a sustained break of $1238 can cause the gold prices to extend decline towards $1210 (38.2% Fib) and the psychological support of $1200. A close below $1200 is likely to negate the chances of near-term up-move by the gold prices and can cause the immediate decline to $1180. Should the gold prices reverse from current level, $1272, $1280, $1295 (76.4% Fib) and the psychological $1300 mark are likely consecutive resistances. Should it manage to sustain the close above $1300, the $1320 and the $1345 are likely important resistances to determine Gold moves.

Also Read: Technical Update - EURUSD, GBPUSD, USDJPY and NZDUSD

SILVER

With the 200-day SMA restricting the up-move of Silver prices, near $18.40, the 100-day SMA and 38.2% Fibonacci Retracement of its July – December decline, between $17 - $16.85, providing strong support to the white metal prices. On the break of $16.85, it can immediately plunge to $16.20 and the $15.95 (23.6% Fib) before extending its decline towards $15.40 and the sub-$15 support region. On the upside, $17.50 is likely to provide immediate resistance to Silver prices, breaking which the 200-day SMA can play its magic before it rallies to $18.75 (61.8% Fib). On the sustained break of $18.75, the white metal can rally towards $19.30 and $19.80 (76.4% Fib).

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Anil Panchal
Market Analyst
Admiral Markets

At any use of the analytical material taken from the site of company Admiral Markets, and the secondary publication on any other resources, the rights to intellectual property for a dealing center «Admiral Markets», the reference to the company site is obligatory. 



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